Wal-Mart hearings neutered by legal advice

Parliament's Portfolio committee on Economic Development called for the hearings more than two weeks ago saying the main purpose thereof was to investigate the impact of the merger particularly on employment, industrial development, local manufacturing and economic development.

It said that submissions made to the committee would afford the opportunity for the public, civil society, and business to comment on the conditions imposed by the Competition Tribunal.

However, after delaying the start of the meeting by 30 minutes on Tuesday morning, 19 July 2011, committee chairperson Elsie Coleman (African National Congress - ANC) read out a statement that showed that the terms of the hearings had been severely curtailed.

Coleman cited a Parliamentary rule that prohibited MPs from referring to issues that were subjected to judicial decision, and so the approval of the Walmart/Massmart acquisition and the conditions imposed by the Competition Tribunal could not be heard as they formed the basis for an appeal.

She said these conditions firstly relate to labour affairs, including the upholding of existing labour agreements; not retrenching workers and possible re-employment of employees retrenched during June 2010.

Secondly the conditions relate to the status of the SA Commercial Catering and Allied Workers Union (Saccawu) as the largest representative union within Wal-Mart (SA).

The last condition related the 100 million rand suppler fund that would be set up by Wal-Mart.

"The committee thus requests that all presenters avoid referring to these issues and rather focus on the impact of this merger and mergers in general - on employment, industrial development, local manufacturing and economic development," Coleman said.

She went on to say that the committee did not wish for these public hearings to be ineffective, but it also did not wish to intrude on the arena of the Competition Appeal Court.

"The purpose of these public hearings is not to scrutinise the Wal-Mart/Massmart deal, nor to prescribe to the Competition Authorities as to what conditions should be imposed on the merger, if the appeal is not upheld, but rather to get first hand input on the impact of mergers on employment, industrial development, local manufacturing and economic development," Coleman said.

Democratic Alliance shadow economic development minister Kobus Marais said the Parliamentary Law Advisor first stated the hearings could go ahead as long as they did not focus on the Competition Tribunal's findings specifically.

"However, since the original opinion, the trade unions launched their appeal against the tribunal's decision and so that means the whole finding is now sub judice, and according to the rules of Parliament, may not be discussed," he said.

Marais stuck to the opinion expressed by him when the hearings were first announced that they were a waste of time and money.

"The advice given to us this morning was that we (the committee) could talk about mergers and acquisitions in general and not discuss this particular case," he said.

Coleman refused to elaborate on her statement when questioned by this reporter as to when the legal advice was obtained.

"I cannot discuss when we received the advice as that is an internal working of Parliament. What do you want to know that for?" she said.

Coleman defended the hearings saying that the first two presentations had produced "concrete" discussions and raised concerns of particular importance to those two parties.

But Marais felt strongly there was no point in continuing to conduct the hearings.

"Even the trade unions have asked Parliament to go carefully," he said. "Furthermore, the actual mandate and outcome of these hearings are not in line with the expectations created by the advertisements placed to inform the public of the hearings."

Trade union Saccawu said in its written submission to the committee that its appeal with the Competition Appeal Court was scheduled for 20 and 21 October.

The Saccawu submission said: "In light of Saccawu's pending appeal, meaningful submissions by it to the committee are premature at this stage since, in the event of a successful appeal, the committee might be better served by submissions considering that outcome in due course and Saccawu respectfully proposes that subsequent public hearings be held once the appeal has been determined by the CAC, hopefully before year-end."

The unions did, however, express its wish to participate in the hearings and attached a copy of the Heads of Argument filed by it with the Competition Tribunal that set out its reasons for being opposed to the acquisition in detail.

During Tuesday's session the committee heard a presentation from Business Unity SA (Busa) that expressed its support for the acquisition and that it would ultimately create jobs in line with government's economic policy - New Growth Path.

However, Busa expressed its concern that the rules and procedures that became apparent during the competition hearings could penalise companies wishing to enter the South African market.

Basil Manganadelis, MD of spaza support-company Walk-in 25 said that large companies entering the traditionally black African retail sector in townships was causing these largely informal community grocery stores to disappear.

He said that while Wal-Mart could do exactly what Massmart could do, in sourcing cheap goods and bringing price pressure to bear on the market, they did have a responsibility to behave ethically in their dealings.

Wal-Mart and Massmart are scheduled to give their presentation on Wednesday right in the middle of a slew of oral hearings from trade unions including labour federation the Congress of SA Trade Unions, Saccawu, the SA Clothing and Textile Workers Union, the National Union of Metalworkers of SA and the Food and Allied Workers Union.